356.24 SUPPLEMENTAL PENSION OR DEFERRED COMPENSATION PLANS, RESTRICTIONS UPON GOVERNMENT UNITS. Subdivision 1. Restriction; exceptions. (a) It is unlawful for a school district or other
governmental subdivision or state agency to levy taxes for, or to contribute public funds to
a supplemental pension or deferred compensation plan that is established, maintained, and
operated in addition to a primary pension program for the benefit of the governmental subdivision
employees other than:
(1) to a supplemental pension plan that was established, maintained, and operated before
May 6, 1971;
(2) to a plan that provides solely for group health, hospital, disability, or death benefits;
(3) to the individual retirement account plan established by chapter 354B;
(4) to a plan that provides solely for severance pay under section
465.72 to a retiring
or terminating employee;
(5) for employees other than personnel employed by the Board of Trustees of the Minnesota
State Colleges and Universities and covered under the Higher Education Supplemental Retirement
Plan under chapter 354C, but including city managers covered by an alternative retirement
arrangement under section
353.028, subdivision 3, paragraph (a), or by the defined contribution
plan of the Public Employees Retirement Association under section
353.028, subdivision 3,
paragraph (b), if the supplemental plan coverage is provided for in a personnel policy of the public
employer or in the collective bargaining agreement between the public employer and the exclusive
representative of public employees in an appropriate unit or in the individual employment contract
between a city and a city manager, in an amount matching employee contributions on a dollar for
dollar basis, but not to exceed an employer contribution of $2,000 a year per employee:
(i) to the state of Minnesota deferred compensation plan under section
352.96; or
(ii) in payment of the applicable portion of the contribution made to any investment eligible
under section 403(b) of the Internal Revenue Code, if the employing unit has complied with any
applicable pension plan provisions of the Internal Revenue Code with respect to the tax-sheltered
annuity program during the preceding calendar year;
(6) for personnel employed by the Board of Trustees of the Minnesota State Colleges and
Universities and not covered by clause (5), to the supplemental retirement plan under chapter
354C, if the supplemental plan coverage is provided for in a personnel policy or in the collective
bargaining agreement of the public employer with the exclusive representative of the covered
employees in an appropriate unit, in an amount matching employee contributions on a dollar for
dollar basis, but not to exceed an employer contribution of $2,700 a year for each employee;
(7) to a supplemental plan or to a governmental trust to save for postretirement health
care expenses qualified for tax-preferred treatment under the Internal Revenue Code, if the
supplemental plan coverage is provided for in a personnel policy or in the collective bargaining
agreement of a public employer with the exclusive representative of the covered employees in
an appropriate unit;
(8) to the laborers national industrial pension fund or to a laborers local pension fund for the
employees of a governmental subdivision who are covered by a collective bargaining agreement
that provides for coverage by that fund and that sets forth a fund contribution rate, but not to
exceed an employer contribution of $5,000 per year per employee;
(9) to the plumbers and pipefitters national pension fund or to a plumbers and pipefitters
local pension fund for the employees of a governmental subdivision who are covered by a
collective bargaining agreement that provides for coverage by that fund and that sets forth a fund
contribution rate, but not to exceed an employer contribution of $5,000 per year per employee;
(10) to the international union of operating engineers pension fund for the employees of a
governmental subdivision who are covered by a collective bargaining agreement that provides for
coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer
contribution of $5,000 per year per employee;
(11) to a supplemental plan organized and operated under the federal Internal Revenue
Code, as amended, that is wholly and solely funded by the employee's accumulated sick leave,
accumulated vacation leave, and accumulated severance pay; or
(12) to the International Association of Machinists national pension fund for the employees
of a governmental subdivision who are covered by a collective bargaining agreement that
provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed
an employer contribution of $5,000 per year per employee.
(b) No governmental subdivision may make a contribution to a deferred compensation plan
operating under section 457 of the Internal Revenue Code for volunteer or emergency on-call
firefighters in lieu of providing retirement coverage under the federal old age, survivors, and
disability insurance program. Subd. 1a.[Repealed, 2000 c 461 art 13 s 4] Subd. 1b. Vendor restrictions. A personnel policy for unrepresented employees, a collective
bargaining agreement for represented employees, or a school board for school district employees
may establish limits on the number of vendors of plans covered by the exceptions set forth in
subdivision 1 that it will utilize and conditions under which those vendors may contact employees
both during working hours and after working hours. Subd. 1c. State Board of Investment review. (a) Any insurance company, mutual fund
company, or similar company providing investments eligible under section 403(b) of the Internal
Revenue Code and eligible to receive employer contributions under this section may request the
State Board of Investment, in conjunction with the Department of Commerce, to review the
financial standing of the company, the competitiveness of its investment options and returns, and
the level of all charges and fees impacting those returns.
(b) The State Board of Investment may establish a fee for each review. The State Board of
Investment must maintain and have available a list of all reviewed companies.
(c) In reviewing companies under this section, the State Board of Investment must not be
considered to be acting as a fiduciary or to be engaged in a fiduciary activity under chapter
356A or common law. Subd. 2. Limit on certain contributions or benefit changes. No change in benefits or
employer contributions in a supplemental pension plan to which this section applies that occurs
after May 6, 1971, is effective without prior legislative authorization.History: 1971 c 222 s 1; 1980 c 600 s 7; 1981 c 224 s 172; 1988 c 605 s 9; 1988 c 709 art
11 s 6; 1989 c 319 art 12 s 3; 1992 c 464 art 1 s 42; 1992 c 487 s 4; 1993 c 192 s 90; 1993 c 239
art 3 s 1; 1993 c 300 s 12; 1995 c 141 art 3 s 16; art 4 s 7; 1995 c 212 art 4 s 64; 1999 c 222 art
18 s 1; 2000 c 461 art 12 s 15; art 13 s 1-3; 1Sp2001 c 1 art 2 s 24; 1Sp2001 c 10 art 7 s 2; 2002
c 392 art 10 s 1; art 11 s 13-16; 1Sp2003 c 12 art 7 s 1; 2006 c 271 art 3 s 40; art 7 s 1